Right now it’s difficult to tell if mortgage rates tanking like this is a good thing or not. Some may take the glass half full approach and say how real estate is more affordable and it’s a great time to refinance your loan. Others may say this must mean that the economy is tanking right alongside mortgage rates rates and the glass is half empty. Regardless of your approach, these are crazy times for sure! Keep in mind that lenders may not be as quick to drop their mortgage rates, as there is a risk/reward they must consider when making loans. Also, residential mortgages are packaged and sold to investors who may lose their appetite after rates drop beyond a certain point.
Sale prices in Fort Lauderdale
In January the average selling price in Broward County was $491,479. The average sale price of a condo in the area was $242,200. Both condos and houses had a 9% increase over January 2019. With rates remaining low and dropping even more, it seems like the American Dream is no longer feasible. Hear is a great read which details yet another reason why housing is no not affordable for most families.
Residential Inventory in Fort Lauderdale area
Condo inventory increased by slightly more than houses in the month January. There were 8,095 condos and 5,087 houses listed for sale. If you want prices to drop, this would be a glass half empty scenario and not a glass half full. Lower inventory keeps prices higher a buyers flock to bid prices up due to the lower borrowing costs and limited supply.
Real Estate Transaction volume
The number of transactions was down in January, but that is typical for that month of the year. Here is a snapshot of the transaction volume in the Greater Fort Lauderdale area since 2012. Obviously the 2020 “average” just represents the month of January, so that number has 11 more months to either increase or decrease depending on market activity.